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Greater transparency in public sector contracts

11/24/2017
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News
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Public and Regulatory Law

José Vicente Morote analyses the new Public-Sector Contract Law

The new Public-Sector Contract Law introduces modifications with the clear objective of promoting transparency and fighting against corruption and, to this end, it includes within its scope application to political parties, trade union and business organizations, as well as foundations and associations linked to any of them, provided that their funding is mainly public and with respect to contracts subject to harmonized regulation.

Adjustments made to the rule, which also transpose Community directives, albeit with a little delay, could have a significant impact on the public procurement system, as, for example, the amounts of minor contracts are reduced, with the works contract not being able to exceed 40,000 euros and those of services and supplies being reduced by 15,000 euros. This limits the discretion to contract without an open procedure in the Public Administration, thereby increasing controls to prevent corruption.

As a new element, it should be noted that, from the date on which the new Law takes effect, in these cases it must be justified that the subject of the contract is not being altered and therefore trying to avoid the application of the general contracting rules and that, in addition, the contractor has not signed more minor contracts that individually or jointly exceed the aforementioned figure. The aim of this measure is to avoid the fragmentation of contracts which has been so widespread in Spain in recent years.

With a view to encouraging the participation of SMEs in public procurement, a general rule of splitting contracts into lots has been established, which becomes the general rule whenever the nature of the contract allows it, in such a way that, in principle, the tenders will be more suitable for SMEs than for large companies, thus boosting the economy of a sector which is made up of mainly small and medium-sized companies. This is a good addition to our legal system, although it will generate certain initial interpretative doubts as to what can be understood as dividable into lots. This special recourse in the contracting area, which is giving very good results, especially in terms of speed, extends its scope of application, no longer being linked to contracts subject to harmonised regulation and may be brought in the case of works contracts, works and service concessions with an estimated value of more than three million euros and service and supply contracts with a value of more than 100,000 euros. This means that, in the event of a challenge, a decision can be reached within one or two months, which prevents illegal situations from being consolidated and increases the legal security of the contracted companies. This is a good decision, although we could say that it has fallen short, because it would have been more appropriate not to limit it, for example, to service contracts exceeding 100,000 euros or to make it compulsory and not optional, as the new law does.

Also, particularly relevant at the level of procurement procedures are the further points given to the regulation of the negotiated procedure, with the option of using it given the amount, as well as the introduction of the simplified open procedure, which hopes to become a very quick one.

Continuing with the contract awarding procedures, in addition to those existing to date, a new procedure known as an innovation partnership is introduced. This has been expressly provided for in cases where it is necessary to carry out research and development activities with respect to innovative works, services and products, for their subsequent acquisition by the Administration. The new Public-Sector Contract Law consolidates the criterion of price quality ratio as an essential award criterion, something that among other elements is intended to be confirmed by the inclusion of social and environmental parameters in the selection of proposals and the execution of contracts.

The standard also sets out measures with the firm objective of combating late payment in commercial transactions, in compliance with Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011. The contracting authority is thus obliged, in the contracts that most frequently involve subcontracting, such as works and services contracts of a certain amount, to verify compliance with payments made by the main contractor to the subcontractor, as well as compliance with payment deadlines, both for the Administration and for the main contractor, to avoid the scourge of default in Public Administrations.

The classification of contracts has been significantly rearranged, with the public service management contract being abolished, redirecting its recourse to one of the remaining categories of service contracts and the public-private partnership contract clearly no longer in use. Regarding works and services, a classification of both is now being implemented in pure works and services contracts on the one hand, and concession contracts with one or another object, the essential difference between them being the place where the contract’s operational risk lies.

These are measures that make it possible to take a closer step towards transparency, agility and support for the Spanish business landscape from the Public Administrations, which are responsible for managing public money efficiently and offering services with maximum legal certainty.